Columbia International Affairs Online
CIAO DATE: 12/5/2007
A Risky Business: Saving Money and Improving Global Health Through Better Demand Forecasts
May 2007
Abstract
Today’s global health programs will attain their objectives only if products appropriate to the health problems in low- and middleincome countries are developed, manufactured and made available when and where they are needed. Achieving this requires mobilizing public and charitable money for more and better products to diagnose, prevent and treat HIV/AIDS, tuberculosis, malaria, reproductive health problems and childhood killers. But more money is only one part of the story. Weak links in the global health value chain—from research and development (R&D) through service delivery—are constraining on-theground access to essential products. The consequences of those weak links are many: supply shortages, inefficient use of scarce funding, reluctance to invest in R&D for developing country needs and, most important, the loss of life among those who need essential products.
One of the weakest links—and one of the most vital for achieving both short- and long-term gains in global health—is the forecasting of demand for critical medical technologies, including vaccines, medicines and diagnostic products. Demand forecasting, which may seem at first glance to be a small piece of the very large puzzle of access to medical products, is of central importance. Many of the shortcomings in funding and functioning of health systems impede accurate forecasting of demand—and without the ability to forecast demand with reasonable certainty and some assurance of a viable market, manufacturers cannot scale production capacity, make commitments to suppliers of raw materials or justify a business case for investing in costly clinical trials and other activities to develop future products. National governments and international funders rely on demand forecasts for budgeting, while health programs and implementing agencies depend on forecasts to plan their supply chain logistics. Thus, in the high-level policy debates about the volume, duration and use of donor funds to support R&D and purchase essential health products, one key fact has often been overlooked: if actions by the international community do not increase the ability to generate credible forecasts of demand—if, in fact, those actions contribute to a situation of greater uncertainty, with higher stakes—efforts to achieve greater access to life-saving and life-extending medicines will be undermined.
